In recent years, franchise expansion in Latin America has experienced significant growth, driven by various factors that have transformed the business landscape. With its diverse economies and expanding middle class, the region has become an increasingly attractive market for national and international brands. As the demand for quality services and products grows, franchise models are proving to be a key driver of investment and business growth across the continent. Brazil and Mexico, the region’s powerhouses, continue dominating the sector, but Argentina’s recent economic recovery adds a new layer of excitement and opportunity for franchise investors.

Brazil and Mexico: The Powerhouses in the Franchise Sector

Brazil has long been the leader in franchise expansion in Latin America, and this dominance shows no signs of slowing down. The country’s large population, growing consumer spending, and diversified economy make it an attractive destination for franchises. Sectors like food, retail, beauty, and education have grown significantly in recent years. According to the Brazilian Franchise Association (ABF), the sector grew by an impressive 14% in 2023, signaling a positive outlook for the industry. One of the key drivers behind this expansion is the increasing adoption of digital tools, including omnichannel strategies that blend physical and online retail experiences. Brands in Brazil are embracing digitalization, integrating digital sales platforms, and enhancing their operations to improve efficiency and customer satisfaction.

Not to be outdone, Mexico is also witnessing a surge in franchise expansion. The country’s growing economy, improved infrastructure, and favorable business environment make it an ideal location for franchises to thrive. Mexico has seen notable growth in industries like technology, health, and tourism, with national and international brands looking to establish a presence. Economic reforms and a wave of foreign investment have created a favorable climate for the franchise sector. As the second-largest economy in Latin America, Mexico’s diverse population and robust consumer demand continue to fuel the growth of franchises. Mexico has become a hotbed for franchise development, with increasing interest in innovative business models, particularly those that cater to the digital and health sectors.

Argentina’s Comeback: A Renewed Interest in Franchising

While Brazil and Mexico have maintained their positions as the leading players in franchise expansion in Latin America, Argentina is quickly reemerging as a promising market for franchises. Argentina faced significant economic challenges for several years, including high inflation rates, currency devaluation, and political instability, which hindered foreign investment and franchise growth. However, the country has shown signs of economic recovery in recent years. Thanks to a series of economic reforms and a more stable business environment, Argentina is once again becoming an attractive destination for international brands looking to expand in the region.

The food sector, in particular, has seen a resurgence in franchise expansion. With local and global brands investing in the market, Argentina’s vibrant food culture and growing demand for dining out fuel this growth. The Argentine Franchise Federation (FAF) reported a 10% increase in new franchise openings in 2023, a strong indicator of renewed confidence in the country’s economy. This recovery is also supported by the growing number of Argentine consumers seeking reliable and quality brands in a market that has faced economic volatility.

International brands, particularly in the food and beverage sector, are taking advantage of Argentina’s current economic climate, establishing their presence in key cities like Buenos Aires, Cordoba, and Rosario. This renewed interest in franchise expansion in Argentina signals that the country’s economy may be on the right track, with both foreign and domestic investors confident in the country’s potential for long-term growth.

Trends Shaping Franchise Expansion in Latin America

Several key trends influencing local and international franchise models shape the franchise landscape in Latin America. One of the most prominent trends is the rise of digitalization. Integrating digital platforms and online sales channels is necessary in today’s competitive business environment. Franchise systems increasingly adopt e-commerce strategies and digital tools to streamline operations, engage customers, and offer more convenient services. For instance, many regional food franchises now offer delivery and takeout services through mobile apps and third-party platforms, making it easier for customers to access their products.

Moreover, integrating technology in managing operations and tracking customer preferences is helping franchises expand their reach. Operational management software enables franchisees to monitor inventory, manage supply chains, and handle customer relations more effectively. This digital shift empowers franchises to enhance customer experiences, improve efficiency, and boost profitability.

However, despite the opportunities, challenges remain. While experiencing economic growth, Latin American countries still face hurdles such as inflation, fluctuating exchange rates, and bureaucratic red tape, which can create obstacles for franchises. In countries like Argentina, inflation remains a concern, and fluctuations in the currency exchange rate can impact profitability and investment decisions. While these challenges are significant, franchises’ ability to innovate and adapt to these economic realities is helping them thrive in the region.

The Future of Franchise Expansion in Latin America

As franchise expansion in Latin America continues to evolve, it is clear that the region’s economic landscape offers both challenges and opportunities. Brazil and Mexico will likely continue to lead the charge with their strong economies, diverse populations, and growing demand for products and services. However, Argentina’s economic recovery provides a unique opportunity for franchises to tap into a market showing renewed potential. The growth of the franchise sector in Argentina will depend on continued economic stability, favorable investment policies, and a sustained focus on consumer-driven business models.

Franchise brands’ key to success in Latin America will be their ability to adapt to changing consumer behaviors, leverage digital technologies, and navigate the region’s economic challenges. With careful planning, strategic investments, and the right market approach, the potential for growth in the Latin American franchise sector remains strong.

In conclusion, franchise expansion in Latin America is poised for continued growth, with Brazil and Mexico leading the way while Argentina shows signs of revival. The franchise sector’s resilience, adaptability, and embrace of new technologies ensure that Latin America remains an attractive destination for investors and brands looking to tap into a dynamic and growing market. The future looks bright for franchises in Latin America, and businesses that can navigate the region’s unique challenges will be well-positioned to succeed.

An economic slowdown in Honduras in 2024 led to fewer private, commercial, residential, and industrial constructions in cities like Choloma, Villanueva, and Tegucigalpa compared to 2023. Although new businesses and private constructions always emerge in these developing municipalities, the number of projects decreased compared to 2023. Experts point out that despite reducing the number of projects, the investments being made, especially in the Sula Valley, are more costly and require much more money and time.

San Pedro Sula’s Growth in Private Construction

San Pedro Sula, one of the major cities in Honduras, saw a 10.5% growth in private developments. In relation to 2023, there was a 10.5% increase in private construction in San Pedro Sula last year. Last year, 556 new constructions emerged, including 23 industrial warehouses, nine shopping centers and office buildings, 36 commercial centers and supermarkets, 38 commercial businesses, six gas stations and service stations, a church, 421 residential projects, 14 apartment buildings, and eight service buildings.

Project Forecasts for 2025

In 2025, 54 projects are being evaluated for approval in Honduras’ cities. Of these, 47 projects are residential, including houses and condominium towers. “Given the trend in recent years, most construction license applications are expected to focus on family and multifamily housing (including condominiums), as well as the construction of more shopping centers and warehouses,” municipal authorities stated.

Construction Permits in the Central District

The Central District, including Tegucigalpa and Comayagüela, registered 287 fewer constructions in 2024 than in 2023. In 2024, 1,903 construction permits were issued in cities in Honduras, with an investment of 10,300,000,000.00 lempiras. Of the 1,903 projects, 1,465 are single-family homes, 148 commercial premises, 43 office buildings, 37 multifamily buildings, 86 warehouses, 52 roadworks, 47 commercial preliminary projects, four urbanizations, and 21 change of use. In the previous year, 656 projects were pending approval, most of them applications for single-family homes.

Future Construction Growth Expectations

A 30% increase in construction permits is expected by 2025, mainly due to new financing policies established by the central government, which include extended deadlines and lower annual interest rates. “There is an expected growth in apartment projects, which have proven to be a viable option for vertical housing in Tegucigalpa and Comayagüela,” said municipal authorities. With the launch of the new San José dam, urban areas are expected to grow in the area leading to Olancho. Commercial projects will continue to develop as they have been, primarily in the city’s outskirts, in the southern part of the municipality.

Choloma’s Growth in the Residential Sector

Choloma, the most industrialized city in Honduras, is growing in the residential sector with new urban projects and independent house constructions. In 2024, the city council approved the construction of over 400 houses, renovations, fence constructions, extensions, and more than 10 apartments, 10 commercial premises, industrial warehouses, a supermarket, a hardware store, and a gas station. The total revenue from these construction permits in cities in Honduras was 10,090,533.40 lempiras in 2024, a significant increase compared to 6,985,894.09 lempiras in 2023.

Villanueva’s Construction Growth

Villanueva approved 264 construction permits in 2024, with a total income of 9,370,875.12 lempiras. The list includes the construction of 94 houses, 19 annexes, 71 fences/walls, four terraces, 15 commercial premises, five warehouses, 26 apartments, one church, six rooms, six logistics offices, and four manufacturing plants. The city council reported that 147 permits had been issued by June 2023, amounting to more than 3,780,149.91 lempiras.

Economic Slowdown and Challenges for the Industrial Sector

There has been an economic slowdown across several cities in Honduras. Raúl Martínez, a real estate expert, asserted there has been a slowdown in commercial and industrial development in the country. “In the industrial sector, free zones are not growing. There are available spaces in the free zones for companies, especially in the last two years when several companies left the country, which has created availability in industrial parks,” he said. The high land cost in San Pedro Sula and the limited availability in Tegucigalpa restrict their development.

Outlook for Office and Apartment Buildings

However, office and apartment buildings will continue to emerge, particularly in the Industrial Capital. However, Martínez highlights that more than half of them do not yet have permits, meaning they are still in planning or under intention. Martínez pointed out that construction revolves around remittances, which is why many municipalities that previously had little development have been seeing significant growth in recent years.

Private Construction Growth in 2024

According to the results of the Survey on Private Roofed Construction Works (ECOPT) by the Central Bank of Honduras (BCH), during the third quarter of 2024, private construction reached a total of 640.6 thousand square meters, representing an increase of 10.6% (61.6 thousand square meters) compared to the same period in 2023. Within private construction in cities in Honduras, residential buildings remain the primary destination, contributing 54.6% to the total square meters built. Vertical buildings, mainly apartments, stand out, with a 172.6% growth in the third quarter of 2024 compared to the same period in the previous year.

Fewer Projects, More Expensive Construction

“Fewer projects but more expensive,” says Gustavo Boquín, president of the Honduran Chamber of the Construction Industry (Chico). He stated that although fewer projects were built in 2023, higher-value works and additional square meters have emerged, as shown in the ECOPT results. “Right now, in the Sula Valley, no massive urbanizations are being built, but rather apartment towers,” he noted. In 2024, around 18,000 homes were not built in Honduras due to delays in the disbursement of funds from Banhprovi. Only 12,000 houses were erected. Boquín explained that the entire government budget was not executed either, impacting construction.

In a recent survey conducted by the Getulio Vargas Foundation (FGV), Paraguay has emerged as the leader in Latin America’s Economic Climate Index (ICE), closing 2024 with an impressive 153.9 points. This marks a significant improvement from the previous quarter, where the country scored 145 points. The ICE measures the overall business environment, considering factors like economic stability, investor confidence, and the ease of conducting business. Paraguay’s top ranking highlights its status as the best destination for local and international regional investments.

Paraguay’s Dominance in Business Climate

Paraguay’s prominent position in the business climate index in Latin America reflects its economic stability and attractive environment for business development. The country’s score of 153.9 points, representing a gain of 8.9 points from the third quarter of 2024, reinforces its favorable position as a business hub in Latin America. Among the 10 countries evaluated, Paraguay stands at the top and continues to outpace its regional counterparts regarding economic climate.

This top ranking is no coincidence. Paraguay’s business-friendly policies, low tax rates, and political stability have contributed to its appeal as a destination for foreign direct investment (FDI). Investors are particularly drawn to the country’s transparent regulatory framework and relatively low operating costs, which make it a competitive choice for business expansion.

The Broader Latin American Context

Following Paraguay, Argentina ranks second in the business climate index in Latin America with 125.9 points, while Peru holds third place with a score of 120 points. Uruguay, Brazil, Chile, and other countries in the region follow with varying levels of investor confidence and economic stability. For instance, Brazil’s score of 85 points and Chile’s score of 69.4 reflect a marked difference from Paraguay’s leading position.

Overall, the region saw a decline in its business environment. Latin America closed 2024 with an average score of 77.9 points, which is 6.2 points lower than the previous year. This decline underscores the challenges many countries face in maintaining favorable conditions for business amid economic volatility, political instability, and other external factors.

Despite these challenges, Paraguay has remained resilient, and its consistent leadership in the business climate index in Latin America signals a strong foundation for continued growth and development.

Paraguay’s Business Environment: Key Drivers of Success

Several factors have contributed to Paraguay’s strong Latin America business climate index performance. First, the country’s stable macroeconomic environment, characterized by low inflation and manageable public debt, provides a favorable backdrop for business operations. The absence of major political or social upheavals further enhances the country’s attractiveness as an investment destination.

Paraguay’s relatively small size and efficient bureaucracy make it easier for businesses to navigate the regulatory landscape. The country has made significant strides in reducing the time and cost associated with starting a business, a key indicator of business climate quality. Moreover, the government’s commitment to improving infrastructure and enhancing connectivity with regional markets has further solidified Paraguay’s position as an economic leader in Latin America.

The agricultural sector, a cornerstone of the Paraguayan economy, is also crucial in shaping the country’s positive business environment. Paraguay has established itself as a key player in global supply chains with a strong export profile, particularly in soybeans, beef, and other agricultural products. This sector’s growth has bolstered the country’s overall economic performance and contributed to its impressive business climate score.

Forecasts for Paraguay’s Economic Growth in 2025

Looking ahead, the outlook for Paraguay in 2025 remains positive despite ongoing risks, such as the drought that has affected the agricultural sector. The Central Bank of Paraguay (BCP) forecasts an economic expansion of 3.8% for the year, reinforcing the country’s position as one of the fastest-growing economies in the region. Strong domestic demand, infrastructure development projects, and the continued attractiveness of Paraguay as a destination for foreign investment support this growth trajectory.

The country’s impressive performance in the business climate index in Latin America positions it well for future growth. However, challenges remain, particularly in managing environmental risks like drought and ensuring the continued diversification of the economy. To maintain its standing as a top business destination, Paraguay will need to adapt to these challenges while continuing to foster a supportive environment for business development.

Conclusion: A Beacon for Investment in Latin America

Paraguay’s leadership in the business climate index in Latin America reflects its successful efforts to create an environment conducive to economic growth and investment. As the country continues to focus on improving its infrastructure, maintaining economic stability, and fostering a favorable business climate, it will likely maintain its position as the region’s top destination for investment.

The positive economic forecasts for 2025 and Paraguay’s strong performance in the business climate index highlight the country’s bright prospects for the future. As Latin America continues to navigate economic challenges, Paraguay stands out as a beacon of opportunity for businesses looking to expand. Its stability, growth potential, and investor-friendly policies make it a model for other countries striving to improve their business climate and attract international investment.

In conclusion, Paraguay’s position as the leader in the business climate index in Latin America is a testament to its current success and a strong indication of the country’s bright economic future. With continued commitment to fostering a positive business environment, Paraguay is poised to remain a regional leader in attracting investment and driving economic growth.

While investments in new vehicle assembly plants have been virtually nonexistent in recent years, the parts industry has led the sector in investment, driving Mexico’s continued rise as a global leader in automotive production. The bustle in Mexico’s parts factories has not slowed down. While announcements of new vehicle assembly plants have been scarce in the last decade, component suppliers have experienced unprecedented growth. Production lines are working at full capacity in industrial parks across states like Coahuila, Nuevo León, Guanajuato, and Querétaro. This is primarily driven by a growing demand for parts manufactured in North America.

Mexico’s Rise as a Global Automotive Leader

Mexico has become the seventh-largest producer of finished vehicles and the fourth-largest producer of auto parts worldwide. Despite the lack of new vehicle manufacturing projects, Mexico has maintained its prominent position in the automotive industry, with an increasing focus on the automotive parts sector. While investments in new assembly plants have been practically nonexistent since 2015, when Toyota announced its plant in Guanajuato, the parts sector has seen a significant increase in Foreign Direct Investment (FDI).

Canceled or Delayed Vehicle Manufacturing Projects

The lack of new vehicle manufacturing plants is not just a matter of missed opportunities. Several initiatives have been canceled or delayed, with major automakers such as Ford and Tesla pulling out of projects in Mexico. Ford’s planned plant in San Luis Potosí was halted after political and economic pressures, and Tesla’s proposed factory in Nuevo León remains on hold. Meanwhile, some initiatives from Chinese brands, which were seen as potential game-changers, have yet to materialize, leaving many in the industry to wonder about the future of Mexico’s role in vehicle assembly.

Strong Focus on Parts Manufacturing Investments

However, despite the stalled vehicle manufacturing projects, Mexico continues to attract investments, especially in parts manufacturing. Existing plants are being modernized and expanded, with companies such as Nissan, General Motors (GM), Stellantis, Volkswagen, Toyota, Audi, and BMW reinvesting in their operations in the country. In 2022, Nissan allocated $700 million to its Aguascalientes complex, and GM invested $1 billion into its Ramos Arizpe facility to boost electric vehicle production. These reinvestments reflect Mexico’s ongoing importance in the automotive supply chain, especially for parts manufacturers in Mexico, which are central to maintaining North America’s competitive edge in the global market.

The Impact of Foreign Direct Investment in the Parts Sector

The expansion of the parts industry in Mexico has profoundly impacted its economic landscape, boosting employment and economic growth. According to the National Auto Parts Industry (INA), FDI in the parts sector reached an astounding $2.55 billion in 2023, surpassing the investment allocated to finished vehicle manufacturers for the first time. The growing importance of the parts sector reflects a broader trend in global manufacturing, where the focus is shifting from vehicle assembly to the components that make up the finished product.

The Role of the USMCA in Mexico’s Parts Industry Growth

Parts manufacturers in Mexico have become key players in the global automotive industry, with FDI expected to have grown by 25.4% in 2024, continuing the upward trajectory in the sector. This expansion can be primarily attributed to the changes introduced by the United States-Mexico-Canada Agreement (USMCA), which replaced the North American Free Trade Agreement (NAFTA) in 2020. The USMCA imposed stricter rules for the automotive sector, requiring more parts to be sourced from within the region. The agreement’s stipulation that 75% of a vehicle’s content must be sourced from North America, up from the previous 62.5% under NAFTA, has driven demand for parts manufacturers in Mexico, as automakers are now required to source more components from the region.

Restructuring the Automotive Supply Chain

Manuel Montoya, director of the Automotive Cluster of Nuevo León and former president of the National Network of Automotive Industry Clusters, explained that the shift in the trade agreement has led to a significant restructuring of the automotive supply chain. “The USMCA is forcing automakers and Tier 1 suppliers to buy regionally. What was previously done in Japan, South Korea, Germany, and China is now being developed in the region,” Montoya said. As a result, parts manufacturers in Mexico are now playing a central role in meeting the increasing demand for regionally sourced components.

Mexico’s Growing Auto Parts Production and Exports

This increase in demand has been mirrored by an impressive growth in Mexico’s auto parts production. In 2023, the value of auto parts production in Mexico reached $120.4 billion, with projections indicating a 2.1% growth, bringing the total to $122.89 billion in 2024. A significant portion of this production is exported, with 87% of Mexico’s auto parts exports being sent to the United States and 3.7% going to Canada. The remaining parts are destined for global markets, further solidifying Mexico’s role as a manufacturing hub for high-quality components.

Regional Integration Boosts Competitiveness

Experts point out that regional integration has been key to the success of parts manufacturers in Mexico. “Here, we can’t speak of Mexico versus the United States or Canada versus the United States. The reality is that the actors in the automotive industry are the same on all three sides of the border,” said Juan Francisco Torres Landa, partner at Hogan Lovells Mexico. This integrated approach has made it possible for parts manufacturers in Mexico to maintain strong ties with their counterparts in the U.S. and Canada, enhancing the competitiveness of the North American automotive industry.

Concerns About Political Uncertainty in the U.S.

Despite the success and growth of Mexico’s parts sector, the uncertainty surrounding the political landscape in the United States has raised concerns about the future of the automotive industry in North America. The recent re-election of Donald Trump as president of the United States has generated speculation about the future of the USMCA framework. During his campaign, Trump hinted at the possibility of imposing tariffs on products made in Mexico, which could jeopardize the current integrated production strategy in the region. This has left many in the industry concerned about the potential impact on trade relations between Mexico, the U.S., and Canada.

Optimism for Mexico’s Automotive Industry

Nevertheless, industry experts remain cautiously optimistic about the future of Mexico’s automotive sector. Gerardo Gómez, CEO of J.D. Power in Mexico, believes that Mexico has become a critical production and export hub, with its parts manufacturing sector meeting the high-quality standards required in markets worldwide. “Mexico has become a production and export hub with quality standards that are appreciated in other parts of the world,” Gómez said. The country’s ability to adapt to the needs of automakers and suppliers in North America has positioned it as a leader in automotive parts production.

Conclusion: Mexico’s Role as a Global Automotive Player

In conclusion, while new vehicle assembly plants may have slowed down, expanding parts manufacturers in Mexico is transforming the country into an indispensable player in the global automotive industry. The country’s strategic location, skilled labor force, and investment in technology have allowed it to emerge as the leading recipient of foreign direct investment in the sector, setting the stage for continued growth in the coming years. As long as the demand for high-quality, regionally produced components remains strong, Mexico’s parts manufacturers will continue to thrive.

In recent years, renewable energy in Costa Rica has become a global beacon of sustainability, proving that a small nation can lead the way in renewable energy and sustainable development. Over the past five years, Costa Rica’s historic achievement of generating 98% of its electricity from clean sources has solidified its position as a leader in renewable energy in Latin America. This extraordinary feat is a testament to the country’s commitment to environmental preservation and its forward-thinking approach that intertwines sustainable practices with economic growth. Highlighted in the 2024 Economy and Development Report (RED) by CAF, Costa Rica has redefined what it means to be environmentally responsible while fostering a thriving economy.

A Commitment to Clean Energy

Costa Rica’s push for clean energy is rooted in the belief that sustainability is the key to environmental preservation and long-term economic prosperity. The country’s energy mix primarily includes hydropower, wind, solar, and geothermal energy. With abundant natural resources, Costa Rica has effectively leveraged these to ensure that nearly all of its electricity comes from renewable sources, reducing its carbon footprint and setting an inspiring example for the world. The success of renewable energy in Costa Rica is also seen in its high residential electrification rate, with 70% of households using electricity for cooking and heating their homes. This transition to cleaner energy reduces reliance on firewood, helps preserve forests, and improves public health by reducing indoor air pollution.

This commitment to renewable energy in Costa Rica has placed the country in a unique position within the global arena, especially as businesses and consumers become more environmentally conscious. International companies and investors are increasingly looking to operate in countries prioritizing sustainability. Costa Rica’s commitment to clean energy has made it an attractive destination for foreign direct investment. According to recent data, Costa Rica saw a 24% increase in foreign direct investment in 2023, and over 59 multinational companies have set up operations in the country between 2023 and 2024. The ability to attract such investments speaks volumes about Costa Rica’s ability to integrate sustainability into its economic framework while creating new job creation and development opportunities.

Economic Growth Driven by Sustainability

Costa Rica’s success is a remarkable example of how countries can decouple economic growth from carbon emissions. As the world increasingly embraces sustainability, industries prioritizing eco-friendly practices are reaping the benefits. This is evident in developing key export sectors such as coffee and cocoa in Costa Rica. In 2024, coffee exports grew by an impressive 16%, while cocoa exports increased by 20%. This surge can be attributed to the growing global demand for sustainable products as consumers become more conscious of their purchases’ environmental and social impacts. Furthermore, renewable energy in Costa Rica has benefited its economy and the regional energy market. Costa Rica exports surplus renewable energy to neighboring countries via the Central American Electrical Interconnection System (SIEPAC), strengthening the region’s energy security, promoting economic development, and environmental stewardship across borders.

Another key initiative strengthening Costa Rica’s position as a regional leader in green energy is the development of the Central American Electrical Corridor, which includes more than 50 charging stations for electric vehicles along major trade routes. This infrastructure is vital for adopting electric mobility, providing a sustainable transportation solution that aligns with Costa Rica’s commitment to reducing carbon emissions.

Innovation and Industrial Transformation

In addition to its success in renewable energy, Costa Rica has become a hotbed for green innovation and industrial transformation. Several cement plants in the country have begun implementing carbon capture technologies, which are helping reduce the carbon emissions typically associated with this industry. This initiative exemplifies how Costa Rica is leading in clean energy production and promoting innovation in carbon reduction across various sectors. The government has also been proactive in supporting the development of green technologies. The Costa Rican Foreign Trade Promoter (Procomer) has allocated $40 million to fund startups focusing on green hydrogen and optimizing electrical networks through artificial intelligence. These investments highlight the country’s commitment to fostering new technologies and industries crucial to achieving sustainability and addressing climate change. Green hydrogen, in particular, holds great promise as a clean energy source that can help decarbonize hard-to-abate sectors like transport and heavy industry.

The Path to a Fully Renewable Latin America

While Costa Rica’s accomplishments are impressive, the road to a fully renewable Latin America is still challenging. According to the RED 2024 report, the region needs to increase its renewable energy capacity by 3.5 times by 2040 to meet its climate goals. However, Costa Rica’s experience offers a model for other regional nations. The key to success lies in public-private partnerships, bioindustrial innovation, and a commitment to sustainable development across all sectors. Costa Rica’s promotion of ecotourism is another area where the country has found a perfect balance between economic growth and environmental stewardship. By leveraging its rich biodiversity and natural beauty, Costa Rica has become a world leader in ecotourism, attracting millions of tourists yearly and promoting conservation’s importance.

Sustainability as a Competitive Advantage

Costa Rica’s commitment to sustainability is not seen as a burden but as a competitive advantage. As Adriana Acosta, director of Esencial COSTA RICA, aptly says, “Sustainability is not a cost; it is our competitive advantage.” This perspective has shaped Costa Rica’s approach to development, and it is a sentiment echoed by the Minister of Environment, Franz Tattenbach, who emphasizes, “Each kilowatt exported strengthens democracy.” These statements reflect the belief that sustainability is not just an environmental issue but an integral part of national security, economic prosperity, and global influence.

Costa Rica’s leadership in renewable energy inspires the world, showing that it is possible to transition to a low-carbon economy while promoting social well-being and economic growth. The RED 2024 report concludes with a powerful message: “The future is renewable, or there is no future.” Costa Rica is proving that a sustainable future is achievable and beneficial for the environment, the economy, and society.

The Global Impact

The lessons Costa Rica has learned, and the innovations it has embraced do not just apply to Latin America. The country’s success story has reverberated around the globe, proving that sustainable development and economic growth can go hand in hand. As the world grapples with the urgent need to address climate change, Costa Rica is showing that the future of energy is renewable, and it is possible to create a thriving, green economy that benefits everyone.

Costa Rica’s leadership in renewable energy in Costa Rica and sustainable development is a powerful reminder that every country, regardless of size, can contribute to the global effort to protect the planet. Through innovation, commitment, and collaboration, Costa Rica is shaping a greener, more sustainable future for future generations.